Technology

Telecoms chiefs want US tech giants to help fund EU network costs

CEOs also criticise high EU spectrum prices and auctions and move to scrap surcharges on intra-EU calls

US tech giants should bear some of the cost of major investment for 5G, fibre and cable networks in Europe because they use them so heavily, telecoms CEOs argue. Photograph: Miquel Benitez/Getty Images

Mon Nov 29 2021 - 09:49

US tech giants should bear some of the costs of developing Europe's telecoms networks because they use them so heavily, the chief executives of Deutsche Telekom, Vodafone and 11 other major European telecoms companies said on Monday.

The call by the CEOs comes as the telecoms industry faces massive investments for 5G, fibre and cable networks to cope with data and cloud services provided by Netflix and Google's YouTube and Facebook.

Investments in Europe’s telecoms sector rose to €52.5 billion last year, a six-year high.

“A large and increasing part of network traffic is generated and monetised by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector,” the chief executives said in a joint statement.

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“This model – which enables EU citizens to enjoy the fruits of the digital transformation – can only be sustainable if such big tech platforms also contribute fairly to network costs,” they said.

The CEOs did not mention any tech firms by name, but it is understood that US-listed giants such as Netflix and Facebook are companies they have in mind.

Signatories to the letter include the chief executives of Telefónica , Orange, KPN, BT Group, Telekom Austria, Vivacom, Proximus, Telenor, Altice Portugal, Telia Company and Swisscom .

The CEOs also criticised high spectrum prices and auctions, used by EU governments as cash cows, saying that these artificially force unsustainable entrants into the market.

EU lawmakers’ attempts to scrap surcharges on intra-EU calls also got short shrift from the CEOs who see this sector as a source of revenue from business users.

“We estimate that they would forcibly remove over €2 billion revenues from the sector in a four- year period, which is equivalent to 2.5 per cent of the sector’s yearly investment capacity for mobile infrastructure,” the companies said.

EU lawmakers have to discuss their proposal with EU countries before it can be adopted and may struggle to find agreement. – Reuters

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